Stock picking isn't smarter than index funds, I was fooling myself for 5 years

I used to think I was hot stuff picking individual stocks, beating the market by 2% one year in 2019. Then I looked at my total returns after 5 years of fees and stress, and realized I came out 8% behind a simple S&P 500 index fund. What tipped me off was seeing my buddy who just dumps money into a target date fund every month ended up with $12,000 more than me. Anyone else realize they were just trading for entertainment instead of actual gains?

3 comments

3 Comments

jenny_hall1mo ago

My buddy Rob did the exact same thing, bought a bunch of meme stocks and crypto in 2021 and he's still down 40% on that stuff while my boring Vanguard fund is up like 15% this year alone. I fell for the same trap too, spent four years picking individual stocks and thought I was some kind of genius because I got lucky with Ford and Apple. But when I actually sat down and added up all the fees and my time spent researching, I realized I would have been way better off just buying the whole market and forgetting about it. The stress was real too, I used to check my portfolio ten times a day and it messed with my sleep sometimes. Now I just auto invest into a total market index fund every paycheck and honestly I don't even think about it anymore. It's boring but boring wins the race, especially when you factor in how much time you waste on that stuff.

janarivera1mo ago

@jenny_hall your buddy Rob and I should start a support group, my 2021 portfolio is still nursing a hangover too.

logan_young291mo ago

Vowed to check my boring index fund less this year and fell asleep halfway through looking at my statement. Best nap I ever had. Boring really does win.